When Atlanta-based developer David Songy acquired a portfolio of seven office buildings in Baton Rouge and New Orleans in October 2013, the nearly $53 million deal was one of the biggest anyone could remember in the local office market.
More recently, Songy’s firm, Songy Highroads, set another record: selling a Washington D.C. Hyatt Place it developed in an old office building near the White House for $68 million, or $415,000 per room. That’s the highest price for a select-service hotel in the D.C. market.
Songy is a native son who made it big in the national real estate scene. Born in Baton Rouge and raised in Alexandria, his twin brother, Michael, and older brother, Chip, both live in Baton Rouge and are active in the business community. One of his close friends and sometimes business partner is developer Mike Wampold. Given his ties to south Louisiana, Songy has a unique perspective on the local office and hotel markets.
What does he see?
“I think Baton Rouge is looked at as a regional, not national market,” he says. “There is limited interest nationally because it is a small office market, but regionally it is considered attractive because of job growth, employment trends and cost of living. So you have some fundamentals that are positive. In general, it is all favorable.”
For Songy Highroads, investment in the local office market has been worthwhile. Since acquiring the office portfolio from developer Tommy Spinosa and subsequently selling two of the smaller ones, the firm has invested around $1.5 million in upgrading the buildings. Today, occupancy in four of the five has climbed from an average of 85% to 99%, Songy says.
Songy says he was originally attracted to the portfolio because the buildings were very well located and in a recovering market. He also considered the price to be fair. He says he hasn’t been disappointed.
“We are very pleased with the market and how the portfolio is doing,” Songy says.
Looking to the future, Songy believes the Baton Rouge office market is poised to grow. Occupancy rates are averaging around 90%, primarily because there isn’t a lot of new construction under way.
“There is very little vacant, quality office space,” he says. “The next step is expansion of the product to increase the supply.”
—Stephanie Riegel
